Home > Oracle and SUN > McNealy dismisses Sun buyout rumorMcNealy dismisses Sun buyout rumor Eugenia Loli 2005-04-29 Oracle and SUN 19 CommentsSun Microsystems CEO Scott McNealy is disparaging a report that suggests an investment firm is planning a leveraged buyout of the server and software company.About The Author Eugenia LoliEx-programmer, ex-editor in chief at OSNews.com, now a visual artist/filmmaker.Follow me on Twitter @EugeniaLoli 19 Comments 2005-04-29 9:57 pm What would happen to Sun if they got bought?I’d personally love to see IBM buy them, open source Solaris under the GPL, merge its tech with Linux and use Sun’s engineers to build the most stable quality business hardware ever.They could have grid-like zero-admin desktop systems that automagicly cluster themselves through simple cerntralized web-based management systems and map redundant/fault-tolerant storage across all the hosts for storing and sharing local data. As well as servers that behave in a similar automated fassion.The problem is these guys don’t do drugs and don’t think creatively about solving IT issues. They hire people to think creatively about selling their lame boring average everyday products. 2005-04-29 10:18 pm I’d personally love to see IBM buy them, open source Solaris under the GPL, merge its tech with Linux and use Sun’s engineers to build the most stable quality business hardware ever. Hmm, if solaris is GPL’d in this manner why merge it with Linux? Aside from drivers and maybe some filesystem code, what is there to gain? In other words, why not just use solaris?The problem is these guys don’t do drugs and don’t think creatively about solving IT issues. They hire people to think creatively about selling their lame boring average everyday products.I couldn’t agree more with regards to the drugs but I really don’t see Sun’s products as boring (expensive sure). A plain old vanilla PC that a person overclocked, put in some blue lights, and installed Gentoo on just like everyone else sounds boring to me. 2005-04-29 10:36 pm Obviously you have never dealt with IBM Global Services, I have and so has one of my co-workers. If you like the idea of having your Enterprise controlled by IBM, that’s fine. I particularly don’t like the idea at all since IBM tends to use only IBM products in their solutions (DB2 vs. Oracle or Informix as an example).Second many of the technologies that Sun and IBM produce overlap and would not necessarily bring “more to the table”. It would not be a good purchase for IBM other than to “squash” competition. I’m sure the SEC would probably have a few questions for IBM if this was remotely possible.And how does “grid-like zero-admin desktop systems” benefit the vast majority of organizations that use computers? Not every problem is solved by clustering computers. Management of this system without sophisticated management software and hardware (very expensive hardware and software). And this solution is only for servers, not desktops.Distributing data across individual PC’s is not a good idea either, with various users doing things that could adversely affecting the availibility and quality of the data. That is why you buy enterprise grade storage (SAN/NAS) and make them fault tolerant (mirroring storage, off-site storage, storage on separate power grids, etc.).I think they are very creative and provide innovative solutions to various enterprise computing problems. There is a huge difference between desktop computing and enterprise computing. Just because you can cluster Linux boxes does not mean that it is a “silver bullet”. Neither Sun or IBM would even attempt to sell a soultion such as what you propose, there is no profit in it for either of them. Dell would be a more likely target for that. IBM or Sun would just as soon sell you “big iron” which cost big bucks to buy and support. 2005-04-29 10:52 pm Yeah, I’ve never dealt with IBM much, personally. A couple experiences with RS/6k. But I’d rather not talk about it. ;PBut I said IBM because they might be big enough to absorb a company the size of Sun. There aren’t many corps that could afford that kind of capital.———-but I really don’t see Sun’s products as boringI see their Opteron systems as being average, compared with what is available today. But their high-end Sparc systems are almost as nice as the SGIs I got to play with. Nicer in some ways. But unless they’ve fixed the quality problems I ran into with the exx00 line, memory board bugs that they swept under the table, etc. I’d rather stick with cheap x86 hardware to save the money I’ll need for maintenance and repairs. Perhaps the SunFire equipment is nicer, I don’t know. It takes time to burn in a server and experience its quality or lack-thereof first hand.I guess quality isn’t the same as boring. I’ve worked on 64P modular systems, so anything less than an SGI Altix or cluster with some fancy software seems kinda boring to me. Zones are cool, tho. To each their own. 2005-04-29 11:05 pm now that would be interesting. Steve could migrate all those sun users to OS X. But apple is valued at $29 billion market cap and sun is valued at $12 billion so i don’t think it is going to happen and i don’t think steve is going to go for a merger. 2005-04-29 11:07 pm if IBM bought them out u could kill the SPARC processor line good bye and that would be a crying shame. if IBM bought them out they would slowly kill off the SUN products and replace them with home grown ones and lock you in. it would be a bad day. 2005-04-29 11:14 pm I’d rather have OSX’s GUI on Solaris on Apple hardware at the low end and Sun servers, with some of Apple’s attention to style and detail on the high end. That would be very nice. I could see that.OSX is nice, but Solaris is probably more efficient and stable, IMO.But I’m a Linux zealot, obviously biased against Sun, and somewhat neutral towards Apple, IBM, RedHat, etc. My bias leans towards Slackware and Debian and Gentoo and possibly BSD, unless we compare it with Linux. 2005-04-29 11:55 pm Obviously nobody seems to have read the article. In particular, the rumor was that Sun was engaged with an investment banking partner to complete a leveraged buyout which would make Sun a private company. This isn’t a hostile takeover by a competitior, rather it is about finding a partner to help Sun re-purchase all of their outstanding shares so that they no longer have to jump through all of the hoops that public companies have to. The investment partner then gets to have a say in how the company is restructured. Usually, in these kinds of deals, the restructured company later goes public again and the investment bankers get to make a ton of cash.So, this isn’t about IBM, Apple, MSFT, or whoever acquiring Sun, so much as it is about Sun looking for a way to restructure without being subject to the whims of Wall Street.Of course, all of this is just a rumor. But even if it were true, it would be in Scott’s interest to deny it. That way it would keep the share price down, making this kind of deal more attactive. 2005-04-30 12:06 am I read the article, I was just responding to the other posts. 2005-04-30 12:15 am Sorry, that was a bit of a sweeping generalization. 2005-04-30 1:30 am “”Why would a supposedly credible rag like BusinessWeek quote an anonymous hedge fund guy on a totally unsubstantiated rumor designed to spike the stock price?” McNealy said. “I will bet this hedge guy is laughing his butt off that BusinessWeek printed this as he profits from the $0.42 rise in the price this morning.””———————————————————-This is just done to boost stock price. Before this hits press, take an option to either buy or sell sun stock. For a couple of hundreded/thousand laid out, plus 1 bogus storie can make hundreds of thousands of dollars, especially in the short run. Prices go out over a long run with buy and sells on options.Brilliant execution. 2005-04-30 1:34 am Great, thanks for bursting my pipedream…So I suppose the tri-core OpterPowerSPARC computer running the LinSolMach operating system on the AquaLookingGnome desktop is out of the question for Q406 then?!?😉 2005-04-30 2:02 am So I suppose the tri-core OpterPowerSPARC computer running the LinSolMach operating system on the AquaLookingGnome desktop is out of the question for Q406 then?!?Hehe, yeah, we’d name it OpenN1JavaGridPenguinXaris. But it won’t be available until Q607. Seriously, though. We already have a 4-core processor in the works. CNET recently ran an article on it:http://news.com.com/New+Sun+priorities+could+speed+Niagara+servers/… 2005-04-30 5:20 am McNEaly is laughing it off but you haven’t heard the last of this I am sure. Expect to hear more in coming weeks.When investors approach a company about taking it private, usually it is because the strategy for turning around the company is fairly straightforward but not being implemented or being implemented poorly/slowly.With Sun there are many angles on this.1. McNealy would be axed or asked to leave or paid out. Anything to get the man out. Not just because he has been a terrible leader, but also because the private investors will want one of “their guys” in the role.2. GET OUT THE AXE. You think you’ve seen layoffs at Sun? How about a 50% reduction in headcount? And thats just to start! If Sun goes private there will be blood on the floor. Entire depts will be gonzo. Anything that does not minimally conform to the new company vision/mission will be axed immediately. I would expect 60%+ to go eventually.3. Product lines/service lines will be radically altered. Sparc probably would be axed immediately, along with Niagra, Rock etc. Private equity wants to take this thing back to the stock market in two years, and that means ditching anything that isn’t a gimme.4. Java would be emphasized…but private equity guys aren’t going to go for the pseudo open JCP stuff…expact all that to be scrapped as Sun would start trying to squeeze some cabbage out of the huge base of code out there. 2005-04-30 6:23 am Sun is good competition.Tho they could be part of an alliance that could take down Microsoft and bring better standards compliance, quality and stability to IT. 2005-04-30 7:07 am 1. McNealy would be axed or asked to leave or paid out. Anything to get the man out. Not just because he has been a terrible leader, but also because the private investors will want one of “their guys” in the role. Scott McNealy, unfortunately is not a businessman; hes an economist; he can count beans, and give a growth of those beans, but he doesn’t have the Bill Gates/Steve Jobs business killer instinct.2. GET OUT THE AXE. You think you’ve seen layoffs at Sun? How about a 50% reduction in headcount? And thats just to start! If Sun goes private there will be blood on the floor. Entire depts will be gonzo. Anything that does not minimally conform to the new company vision/mission will be axed immediately. I would expect 60%+ to go eventually.I personally can’t work out how SUN, with revenues of around $9billion can justify employing 30K people. There are companies out there, making a BIGGER profit and revenue, and have CONSIERABLY less people employed.3. Product lines/service lines will be radically altered. Sparc probably would be axed immediately, along with Niagra, Rock etc. Private equity wants to take this thing back to the stock market in two years, and that means ditching anything that isn’t a gimme.I don’t see it happening. What I’d see happening is finally SUN putting their fabrication contract up for tender and split it between UMC, TSMC and Ti. Its time SUN dropped its xenophobic business attitude, opened their selves up and started to embrace things beyond the shores of the US.4. Java would be emphasized…but private equity guys aren’t going to go for the pseudo open JCP stuff…expact all that to be scrapped as Sun would start trying to squeeze some cabbage out of the huge base of code out there.Either that, or they simply find a way to still make money and yet reduce the cost of development – joint IBM/SUN grand alliance etc. 2005-04-30 12:07 pm Probably SUN already got sold. 2005-05-02 5:43 am I think this might be in preparation for open sourcing Solaris and Java. Sun could not do this as a “public” corporation because the stockholders would be up in arms at giving away so much of the store. However as a private company owned by McNealy and his (and his bankers’) board of directors alone they could.I really think Sun is looking to get out of much of the software business except for support and going back to being a pure hardware company ala IBM.Actually Sun’s Star Office as it exists now is just proprietary support packages for Open Office and I think other Sun Software will be moving in the same direction. 2005-05-02 5:02 pm I’d personally love to see IBM buy them, open source Solaris under the GPL, merge its tech with Linux and use Sun’s engineers to build the most stable quality business hardware ever.That is a frightening thought! IBM i a huge top heavy corporation and frankly i can’t understand how they manage to stay in the black. I know becasue i have worked for them. They suffer from employees that have worked for the company for decades and have no clue on how modern IT operates they have the we have been doing the same thing for the last 20 years why change it? mentality.On the other matter a buyout of te type cescribed is usually a way to clean all the turds out or a company and install new leadership something i think would do SUN a world of good. Sure McNeally was beaten back some and brought on line with a new line of thinking but he still is NOT the person to be leading SUN into the new millenium.